Critical Home Buyer Advice

🤔2 things most homebuyers are NOT aware of…but should be!

Hi! It’s Eva Lin, #1 agent for Pasadena homes sold in 2021 and 2022.

You’ve probably seen those real estate ads that say, “Now is STILL a great time to buy!”

These ads drive me crazy!

The truth is, for some people it is a great time to buy, but for others…

…it’s a lot harder than it was earlier in the year.

Higher mortgage rates mean higher monthly payments and the affordability challenge is real.

But, I’m here to help!

If you’re thinking of buying a home…

…it’s important for you to know all the options available to you.

This will allow you to make an informed decision about whether it is or is NOT a great time to buy.

👉 The first thing buyers should know is…

…you can “buy down” your mortgage rate, which lowers your monthly payment.

There are several ways to do this.

1️⃣ “Paying Points.”

In many cases, paying 1% of your loan amount up front allows you to…

…lower your mortgage rate by 1/4 of a percent.

So, if you had a $1,000,000 loan at a 6.5% rate, you could buy a 6.25% rate for $10k.

If you paid $20k, your rate would drop to a flat 6%, and so on.

If you have extra cash on hand, this strategy can significantly reduce your monthly payment.

2️⃣ Seller Paid Buydown.

In this case, we negotiate for the seller to give you a credit at the close of escrow.

This credit then goes to the lender to lower the amount of YOUR monthly payment.

Many sellers would prefer to offer this concession rather than a price reduction.

3️⃣ Lender-Paid Buydown.

This is usually done through what’s called a 3-2-1 or a 2-1 mortgage.

The lender pays to lower your monthly payment for the first 1, 2, or 3 years of your loan term.

Now, to be clear, this is NOT an adjustable-rate mortgage.

It’s just an upfront credit offered by lenders for a specific period of time.

👉 The second thing buyers should know is…

…you may be able to refinance in the future at a lower interest rate.

In 2021, 30-year mortgage rates averaged about 3%.

As we close out 2022, they’re at 6.5%.

The good news is you’re not stuck with 6.5% rate because…

…you can refinance and lock in a lower interest rate down the line.

⚠️ Now, this assumes rates actually DO go down in the future!

Everybody has their own opinion on whether that’s likely to happen or not.

I suggest you do your own homework and decide for yourself.

But, if you believe rates are likely to come down…

…then you can be more confident purchasing at today’s rate.

After all, the rate is likely to be temporary whereas the house you purchase is yours forever (or until you sell it, of course!).

If you’d like to discuss any of these home buying options, I invite you to reach out to me.

Schedule your no-pressure consult with Eva Lin.

Learn how I work, deliver outstanding outcomes, and treat your interests as my own every step of the way.

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